Column: Increase in oil production a private sector triumph

Our American private enterprise system has once again proven that it can get things done in spite of our big federal government. U.S. oil production has now reached a 20-year high. This is due to the resourcefulness of private businesses and entrepreneurs. Our country is now on the path to becoming energy self-sufficient for a while.

The U.S. is expected to become the top oil producer in the world by 2015. This is the conclusion of the International Energy Agency in its annual World Energy Outlook analysis. The projection is that we will be energy self-sufficient in the next two decades.

This is due to the use of fracking and horizontal drilling to recover shale oil in fields such as the Bakken formation in North Dakota and Eagle Ford in Texas. According to the March 4 Telegraph News, the U.S. imported two-thirds of our oil seven years ago. Today we only import a third. Of course, our needs had also dropped substantially due to our “great recession”.

Fracking uses water mixed with sand and chemicals. The mixture is injected at high pressure into an oil well bore. This creates small fractures that allow fluids such as gas and oil to migrate to the well to be pumped out. This substantially increases the oil and gas yield.

Recent gas and oil developments have been done primarily on private or reservation lands. The number of federal permits for public lands were down by 36 percent during President Obama’s first term. Drilling permits increased by 58 percent under President Clinton and 116 percent under George W. Bush.

Not only has fracking increased our oil production, but it has also generated huge amounts of natural gas. This has driven the price down significantly.

According to the U.S. Energy Information Administration, natural gas will be the source of 82 percent of new electrical energy generating capacity this year. This also is a lower emission source than coal.

Some trucking companies are in the process of changing their trucks over from diesel to liquefied natural gas. The natural gas is much cheaper and cleaner burning. This is a good move as much of the gas now is flared off at the oil wells because of the cost of recovery and distribution.

Texas oil production has more than doubled and North Dakota has tripled since 2010. The Insider Report attributes the U.S. energy boom for increasing household income by $1,200 last year. It projected that the lower energy prices will increase household disposable income by $2,700 in 2020.

The first new refinery in over 30 years was approved just three weeks before the last presidential election. This was to benefit the three affiliated tribes of the Fort Berthold Reservation of North Dakota. Read the U.S. Department of the Interior press release here: http://www.bia.gov/cs/groups/public/documents/text/idc-022703.pdf .

Some new very small refineries will be built to supply diesel fuel to oil development operations in the Bakken area and possibly Canada. These will use some of the natural gas that is now being flared for their operations. One will be located West of Dickinson and another southwest of Williston in North Dakota.

In spite of the many years of denying construction of new refineries, the refiners have worked around the problem. According to an April 10 article by Eliot Caroom of Bloomberg News, the refinery capacity in the U.S. has reached a record level. This has been accomplished by expanding existing refineries and improvements in refining processes.

These advances have occurred even though there have been roadblocks by our federal government. It has not authorized the Keystone XL pipeline that could deliver crude to our Gulf Coast refineries.

These days both Bakken and Canadian crude are being delivered through other pipeline systems and by rail or truck.

Conditions have changed so much that U.S. refiners are exporting record amounts of fuel to overseas customers.

Tankers are also delivering Texas crude to east coast Canadian refiners for processing.

We will all share the benefits from an increased and cheaper domestic energy supply. This will reduce the need for importing oil from other countries. Our private enterprise system deserves the credit for moving ahead on this in spite of the obstacles. We will all benefit.

Chuck Drury is an Anoka resident, retired engineer and former technical director of Federal Cartridge Company.

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